Oddest thing that no one has picked up on this. It is just an optical illusion that its an arm.

Look at the branches/leaves that make up the space that defines the arm before it stands up. The leaves are always there, and when the, assuming bear, stands up, it does so behind the leaves, making it seem like it has an arm. It's actually fairly obvious once you watch the video in full screen.

Just an optical illusion from the camera and some pretty lucky cameraman placement. I doubt someone in person would have been fooled as such from that distance (2d video vs our perception of 3d), specially the friends being more so to the right. It being a bear, I probably would've run also. They probably didn't know what they had until they showed it to friends afterwards and thought they could have some fun and fame to play it out.

Even just look at this blown up pic from the big foot site. Keeping in mind that those are leaves, the pic becomes a lot more clear of what and how it really happened.